UPS revives Airbus A380 deal
02-23-2007, 10:22 AM
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Che Guevara
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UPS revives Airbus A380 deal
ATLANTA - Despite a two-year delay in the rollout of the new A380 double-decker jet, UPS Inc. continued Friday to focus on the new plane's potential by working out an agreement with Airbus revising delivery dates for its 10-plane order and allowing either party to terminate the purchase order later this year.
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In contrast, UPS rival FedEx Corp. responded to the new plane's delays by canceling its A380 order with Toulouse, France-based Airbus in November and announcing it would purchase 15 U.S.-made Boeing 777 freighters with an option to buy 15 more.
UPS, the world's largest shipping carrier, ordered its first 10 A380F jets in January 2005 for use on U.S.-Asia routes. The deal included an option to buy 10 more planes. Deliveries originally were to begin in 2009 and run through 2012.
UPS and Airbus officials declined Friday to disclose the new delivery dates. The agreement was signed Thursday, UPS said.
Airbus spokeswoman Barbara Kracht confirmed a new agreement had been reached but declined to comment further.
UPS spokesman Norman Black also declined to reveal the financial terms of the original deal. The A380 sells for as much as $280 million at retail prices but large airline customers typically negotiate steep discounts. Black declined to say whether the new agreement included price concessions from Airbus.
In January 2005, UPS picked the A380 because "there's no other airplane like this," Black said during the company's 2005 purchase announcement. The company wanted to take advantage of the super-jumbo jet's size to maximize what it could ship on its existing high-demand routes between the United States and Asia.
But the A380 program has had a two-year delay in delivering the new planes to customers. John Leahy, Airbus' chief operating officer for customers, said Feb. 7 that technical problems responsible for the delays appeared to have been resolved.
UPS has been "carefully evaluating various options since Airbus announced production delays late last year," Bob Lekites, UPS vice president of airline and international operations, said in a statement.
In the meantime, UPS will rely on previous orders for new MD-11 and Boeing 747 freighters for the high-demand routes the A380s will eventually fly, Black said.
Airbus has suffered from costly production setbacks and this week delayed an expected announcement of its restructuring plan that was expected to involve extensive job cuts.
German and French leaders sought Friday to defuse tensions over the politically fraught restructuring drive, stressing their common interest in a fair sharing of the resulting cutbacks and opportunities.
German Chancellor Angela Merkel and French
President Jacques Chirac said in a joint statement after meeting outside Berlin that they "stand behind Airbus" as the European plane maker puts together its delayed program.
____
Associated Press writer Laurence Frost in Paris contributed to this story.
ADVERTISEMENT
In contrast, UPS rival FedEx Corp. responded to the new plane's delays by canceling its A380 order with Toulouse, France-based Airbus in November and announcing it would purchase 15 U.S.-made Boeing 777 freighters with an option to buy 15 more.
UPS, the world's largest shipping carrier, ordered its first 10 A380F jets in January 2005 for use on U.S.-Asia routes. The deal included an option to buy 10 more planes. Deliveries originally were to begin in 2009 and run through 2012.
UPS and Airbus officials declined Friday to disclose the new delivery dates. The agreement was signed Thursday, UPS said.
Airbus spokeswoman Barbara Kracht confirmed a new agreement had been reached but declined to comment further.
UPS spokesman Norman Black also declined to reveal the financial terms of the original deal. The A380 sells for as much as $280 million at retail prices but large airline customers typically negotiate steep discounts. Black declined to say whether the new agreement included price concessions from Airbus.
In January 2005, UPS picked the A380 because "there's no other airplane like this," Black said during the company's 2005 purchase announcement. The company wanted to take advantage of the super-jumbo jet's size to maximize what it could ship on its existing high-demand routes between the United States and Asia.
But the A380 program has had a two-year delay in delivering the new planes to customers. John Leahy, Airbus' chief operating officer for customers, said Feb. 7 that technical problems responsible for the delays appeared to have been resolved.
UPS has been "carefully evaluating various options since Airbus announced production delays late last year," Bob Lekites, UPS vice president of airline and international operations, said in a statement.
In the meantime, UPS will rely on previous orders for new MD-11 and Boeing 747 freighters for the high-demand routes the A380s will eventually fly, Black said.
Airbus has suffered from costly production setbacks and this week delayed an expected announcement of its restructuring plan that was expected to involve extensive job cuts.
German and French leaders sought Friday to defuse tensions over the politically fraught restructuring drive, stressing their common interest in a fair sharing of the resulting cutbacks and opportunities.
German Chancellor Angela Merkel and French
President Jacques Chirac said in a joint statement after meeting outside Berlin that they "stand behind Airbus" as the European plane maker puts together its delayed program.
____
Associated Press writer Laurence Frost in Paris contributed to this story.
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